BJ
BJ's Wholesale Club Holdings, Inc.
$94.36
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 33.1% below fair value
You pay
$94.36
Bear
$116.11
Fair
$140.99
Bull
$165.87
Bear
$116.11
+23.0%
$4.44 × 28x P/E
Fair
$140.99
+49.4%
$4.44 × 34x P/E
Bull
$165.87
+75.8%
$4.44 × 40x P/E
Key Value Driver
Normalized P/E multiple (34x base case)
Implied Market Multiple
21.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $111.50 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $140.99 per share.
Warnings
Wall Street's average price target is $111.50 (from 27 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples